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Royal Caribbean Cruises reduces its loss as it steers back to calmer waters

Published: 13:59 07 Feb 2023 EST

Royal Caribbean Cruises Ltd - Royal Caribbean reduces its loss as it steers back to calmer waters
Royal Caribbean said 2022 was a pivotal year as it successfully returned its business to full operations

Royal Caribbean Cruises Ltd (NYSE:RCL) stock rose after it reported fourth-quarter results that exceeded its guidance and said its business had returned to full operations. 

The cruise company said load factors for the three months to December 31, 2022, were in line with guidance at 95%, with Caribbean sailings reaching 100% and holiday sales close to 110%. 

"2022 was a pivotal year as we successfully returned our business to full operations and delivered memorable vacation experiences to 6 million guests," Royal Caribbean president and CEO Jason Liberty said in a statement. "We also returned to positive adjusted EBITDA and operating cash fFlow by consistently growing revenue and controlling costs."

Total revenues per passenger cruise day were up 3.5% as-reported and 4.5% in constant currency, compared to the fourth quarter of 2019, the company said. That resulted in total revenues for the quarter of $2.6 billion, up from $982 million a year earlier. Its adjusted net loss narrowed to $284.9 million or $1.12 per share, and adjusted underlying earnings (EBITDA) reached $409 million.

For full-year 2022, load factors reached 85% as its full fleet of 64 ships returned to operation in June. It reported total revenues of $8.8 billion, up from $1.5 billion in 2021. Its adjusted net loss narrowed to $1.9 billion, or $7.50 per share, with an adjusted EBITDA of $712 million. 

Record-breaking wave season 

Royal Caribbean said the seven biggest booking weeks in its history have occurred since its last earnings call in November 2022 and that its 2023 cumulative booked position remains well within historical ranges for all quarters and at record rates.

It expects net yields to increase 2.5% to 4.5% in both as-reported and in constant currency versus 2019, ramping up as load factors reach historical levels by late spring.

"We are experiencing a record-breaking wave season, resulting in a booked position approaching previous record highs and at higher prices,” Liberty added. This, along with the normalization of our booking window, provides the visibility for us to provide annual guidance.

"The combination of our industry-leading global brands, most innovative fleet, nimble sourcing and our continued focus on profitability positions us well to deliver record yields and adjusted EBITDA in 2023."

The company’s shares traded 3.8% higher at $71.80 in early afternoon trade in New York. 

Contact the author at stephen.gunnion@proactiveinvestors.com

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